Collective versus individual interests: The varying effects of public goods and services on tax attitudes in Africa

Abstract

AbstractObjectiveTaxation is crucial for revenue, political participation, and the demand for accountability in Africa. Most existing theories do not predict tax attitudes in informal economies with weak institutional capacity nor do they demonstrate how service delivery translates to stronger tax regimes. This article examines the fiscal exchange theory— how government's expenditure affects voluntary compliance—across Africa, showing mechanisms through which service delivery affects tax morale.MethodsThe study uses a public opinion survey of over 41,000 respondents from 29 countries in sub‐Saharan Africa. The statistical analysis employs an ordered logit model and linear probability model to test the hypotheses.ResultsThe study finds that service delivery determines tax attitudes. In addition, the study examines aspects of service delivery that are of most concern to citizens and finds that services that cater to individual needs are stronger in inducing tax morale than those that address collective needs. The article also finds that citizens’ acknowledgement of receipt of goods is not an indication of inherent incumbent support.ConclusionThis study sought to understand the relationship between different modes of service delivery and the likelihood of having tax morale among African citizens and ultimately sheds light upon citizen–state relationships, effective governance, and voluntary compliance.